Depreciation

question 4

Multiple Choice

Depreciation

• A)reduces both the net fixed assets and the costs of a firm.
• B)decreases net fixed assets,net income,and operating cash flows.
• C)is a noncash expense that decreases the selling,general,and administrative expenses.
• D)is a noncash expense that reduces the pretax income.
• E)increases the net fixed assets as shown on the balance sheet.

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Definitions:

Durables

Products or goods with a long life span, such as cars, appliances, and furniture, as opposed to consumables that are used up quickly.

Nondurables

Goods with a short life span and typically consumed in a short period after purchase, such as food, beverages, and paper products.

Services

Activities, benefits, or satisfactions that are offered for sale that are essentially intangible and do not result in the ownership of anything.

Murray Weidenbaum

An American economist known for his contributions to public policy, environmental economics, and as a key economic advisor during the Reagan administration.